Chicago's latest IPO: a Bears wide receiver

For those sitting on the sidelines during Chicago's spate of initial public offerings over the past two years, another intriguing option is in the pipeline: Bears wide receiver Alshon Jeffery.

Fantex Inc., a San Francisco-based company that lets investors buy and sell stock in a professional athlete's “brand value,” announced today that it will pay nearly $8 million for 13 percent of Mr. Jeffery's brand value.

That's the first step toward an IPO tied to Mr. Jeffery's total future earnings, which would make him one of the first professional athletes to go public with a chunk of his future income.

Mr. Jeffery's Fantex “brand value,” which the company calculates mostly based on a projected length of his playing career, suggests his total future earnings will be about $61 million.

The Fantex premise works like this: The company buys a portion of an athlete's future earnings and publicly offers an assigned number of shares of stock, with Securities and Exchange Commission approval.

The value of the stock is linked to the athlete's economic performance. So if a player signs a more lucrative contract or companies flock to him for endorsements, investors might buy shares and increase his stock. The earnings would apply after an athlete retires, too, for appearance fees, business ventures or endorsements.

Investors can buy and sell shares only via Fantex, which takes a commission on each trade.

OTHER PLAYERS

Two NFL players are on the market: San Francisco 49ers tight end Vernon Davis and Buffalo Bills quarterback EJ Manuel. Houston Texans running back Arian Foster, who last year was the first to announce his involvement with Fantex, postponed his IPO as he continues his comeback from an injury-plagued 2013 season.

Cincinnati Bengals wide receiver Mohamed Sanu's stock is expected to be open for trading in the coming weeks.

After the stock goes public, Fantex helps to establish the athlete's brand and, hopefully, increase the value of his stock. Last month, the company paid its first dividend to investors, offering 70 cents per share to all Vernon Davis stockholders.

So far, the stock prices of Messrs. Davis and Manuel haven't changed much from their IPO price of $10 per share because of a relatively small trade volume.

Fantex CEO Buck French said that the company has "thousands" of investor accounts and that trades have come in fits and starts, with some days seeing as many as 2,000 shares changing hands and others with none.

"So far for us, it's tracking with our business plan," Mr. French said. "As more people become aware and have an informed opinion (of the market) you'll see more trading one way or the other."

JEFFERY'S PROSPECTS

Mr. Jeffery, 24, is in the third year of a four-year, $4.6 million contract with the Bears and made a big splash on the NFL scene last season when he totaled 1,421 receiving yards — the second-most in Bears history — and made the Pro Bowl.

He is represented by Los Angeles-based Relativity Media, though it was not immediately clear whether he has any active endorsement deals. A Relativity spokeswoman did not respond to a request for comment.

Fantex now will register with the SEC the security tied to Mr. Jeffery's earnings, a process that historically has taken about a month, Mr. French said.

After that, investors will be able to reserve shares of Mr. Jeffery's stock during a period that typically takes eight to 10 weeks before the security begins trading on the open market.